The Politics of CEOs

Abstract

CEOs of public companies have influence over the political spending of their firms, which has been attracting significant attention since the Supreme Court decision in Citizens United. Furthermore, the policy views expressed by CEOs receive substantial consideration from policymakers and the public. The political preferences of CEOs, we argue, are therefore important for a full understanding of U.S. policymaking and politics. To contribute to this understanding, we provide empirical evidence on the partisan leanings of public-company CEOs.

We use Federal Election Commission (FEC) records to put together a comprehensive database of the political contributions made by over 3,500 individuals who served as CEOs of S&P 1500 companies during the period 2000-2017. We find that these political contributions display substantial partisan preferences in support of Republican candidates. We identify how this pattern is related to the company's industry, geographical region, and CEO gender. To highlight the significance of CEO's partisan preferences, we show that public companies led by Republican CEOs tend to be less transparent to investors with respect to their political spending. We conclude by discussing the policy implications of our analysis.

Keywords: CEOs, corporate political influence, Democrats, Political contributions, Political spending, Republicans

JEL Classification: G3, G34, G38, K2, K22